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Hedge fund manager's film scheme investment comes unstuck
by Daniel Grote on Mar 01, 2013 at 12:28
A hedge fund manager has seen a £5 million investment come unstuck after HM Revenue & Customs (HMRC) won a court battle against film scheme Goldcrest Pictures.
The scheme sold rights in two feature films to hedge fund manager Patrick Degorce for an artificially inflated figure of £21.9 million, according to HMRC. Degorce only paid £4.8 million, then immediately sold the rights back to Goldcrest for a fraction of the price, and aimed to set the loss against the £18.8 million profits of his hedge fund.
The tax tribunal has ruled against the scheme, claiming it did not work, with users not afforded tax reliefs and ending up out of pocket as a result of fees.
Jim Harra, HMRC director-general of business tax, said: 'Mr Degorce put in nearly £5 million of his own money, including £1.6 million which went into the promoter's pocket, but all it has come away with is an HMRC enquiry and an appearance before a tax tribunal.'
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